October 12, 2023
The time it takes to close a mortgage loan, also known as the closing process, can vary depending on several factors. On average, the closing process typically takes around 30 days, but it can be shorter or longer based on the following variables:
Type of Loan: The type of mortgage you're applying for can influence the timeline. Government-backed loans like FHA or VA loans might have slightly different processes that can impact the timeline.
Documentation: The time it takes to gather and provide the required documentation can impact the process. Having all your financial documents ready can help expedite the process.
Home Appraisal: An appraisal is typically required to determine the value of the property. Delays in scheduling or processing the appraisal can extend the closing timeline.
Title Search and Insurance: Ensuring the property's title is clear and obtaining title insurance can take time, particularly if there are any title issues that need to be resolved.
Loan Underwriting: The underwriting process involves a thorough review of your financial information and the property details. This step can take some time, especially if there are any discrepancies or additional information required.
Contingencies: If there are contingencies in your offer, such as repairs to be made by the seller, resolving these issues can affect the closing timeline.
Communication and Responsiveness: Clear and timely communication between all parties involved—lender, real estate agent, buyer, seller—can help keep the process on track.
Unforeseen Issues: Sometimes unexpected issues arise that can prolong the closing process, such as delays in obtaining necessary documents or unexpected repairs.
While 30 days is a common range, it's important to work closely with your real estate professionals to get an accurate estimate for your specific situation. Staying organized, promptly providing requested documents, and addressing any issues as they arise can help ensure a smoother and more efficient closing process.
October 11, 2023
When applying for a mortgage loan, you'll need to provide various documentation to the lender to verify your financial information and determine your eligibility. Here's a list of documents you may need:
Personal Information:
Proof of Identification: Driver's license, passport, or other government-issued ID.
Social Security Number: To verify your identity and check your credit history.
Financial Information:
Proof of Income:
Pay Stubs: Typically, the most recent months’ worth.
W-2 Forms: Typically for the past two years.
Tax Returns: Usually for the past two years if you're self-employed or have additional income.
Proof of Additional Income: This could include rental income, bonuses, alimony, etc.
Proof of Assets:
Bank Statements: Typically for the past two to three months for all accounts.
Investment Statements: Statements for retirement accounts, stocks, bonds, etc.
Gift Letters: If a family member is giving you funds for the down payment, a gift letter is required.
Debts and Obligations:
Credit Card Statements: To verify your monthly payments.
Auto Loans, Student Loans, and Other Debt: Documentation showing your monthly obligations.
Property Information (for Home Purchase):
Purchase Contract: If you've already made an offer on a home.
Listing of Assets: Detailed list of personal property included in the sale.
Property Information: Details about the property you're buying.
Additional Documents:
Explanation Letters: If you have any situations, you may need to provide a letter of explanation.
If you're paying or receiving alimony or child support.
Divorce Decree, Bankruptcy, or Foreclosure documentation if applicable.
Keep in mind that specific requirements can vary depending on the type of loan. Providing accurate and complete information is crucial for a smooth mortgage application process. If you have any questions, please contact me or my team. We would like to help you determine what is the best loan for your homeownership goals.
October 10, 2023
A VA (Department of Veterans Affairs) mortgage loan is a type of home loan designed to help eligible veterans, active-duty service members, certain members of the National Guard and Reserves, and some surviving spouses become homeowners. VA loans offer several benefits to make homeownership more accessible for those who have served in the military. Here's what you need to know:
Advantages of VA Mortgage Loans:
No Down Payment: One of the most significant advantages is that VA loans typically require no down payment. This can make it easier for eligible individuals to purchase a home.
No Private Mortgage Insurance (PMI): Since VA loans are backed by the government, they don't require private mortgage insurance, even with no down payment. This can result in lower monthly payments.
Competitive Interest Rates: VA loans often have competitive interest rates, which can help you save money over the life of the loan.
Flexible Credit Requirements: While specific requirements vary, VA loans generally have more flexible credit score requirements compared to conventional loans.
Assumable Loans: VA loans are assumable, meaning that if you sell your home, the buyer can take over your VA loan if they qualify. This can be an advantage if interest rates have risen.
Limited Closing Costs: VA loans come with certain restrictions on the types of closing costs that veterans can pay. This can help reduce the upfront costs of purchasing a home.
Eligibility Requirements:
To qualify for a VA loan, you need to meet specific service requirements, which include serving a minimum period of active-duty service, being an honorably discharged veteran, or meeting the requirements for National Guard or Reserves service. Surviving spouses of deceased service members may be eligible.
Loan Limits:
VA loans do have loan limits, which vary by location. If you're looking to purchase a home that exceeds the loan limit, you may need to make a down payment on the portion of the loan that exceeds the limit.
Funding Fee:
While VA loans offer many advantages, they do come with a funding fee, which is a one-time fee that helps fund the VA loan program. The fee can vary based on factors like the type of military service, down payment amount, and whether it's your first VA loan.
If you're eligible for a VA loan, it's recommended to review this benefit. Before deciding, please contact me or my team. We would like to help you determine what is the best loan for your homeownership goals.
October 5, 2023
The amount of a down payment you need when buying property can vary depending on several factors, including the type of mortgage you're applying for, the price of the property, and the lender's requirements. Here are some general guidelines for different types of mortgages:
Conventional Loans: Conventional loans typically require a down payment of at least 3% to 5% of the home's purchase price. However, putting down less than 20% may require you to pay for private mortgage insurance (PMI) to protect the lender in case you default.
FHA Loans: FHA loans are insured by the Federal Housing Administration and often have lower down payment requirements. With an FHA loan, you can put down as little as 3.5% of the home's purchase price. However, you'll still need to pay for mortgage insurance.
VA Loans: VA loans are available to eligible veterans and members of the military. These loans often require no down payment at all.
USDA Loans: USDA loans are backed by the U.S. Department of Agriculture and are designed for low-to-moderate-income borrowers in rural areas. They typically require no down payment.
Jumbo Loans: If you're buying a high-priced property that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac, you might need a jumbo loan. These loans often have stricter requirements and might require a higher down payment, often around 10% to 20%.
It's important to note that while a higher down payment can lower your monthly mortgage payments and potentially help you secure a better interest rate, it's not always required. There are loan options available that allow for lower down payments, but this might mean paying more in interest over the life of the loan.
Consider your own financial situation, including your savings, monthly budget, and long-term financial goals, when deciding how much to put down. Additionally, keep in mind that in addition to the down payment, you'll need to budget for closing costs, which can range from 2% to 5% of the home's purchase price.
Before making a decision, it's a good idea to consult with a mortgage professional who can help you understand your options and find the best fit for your circumstances.
September 28, 2023
Discount points, also known simply as points, are a form of prepaid interest that you can pay at the time of closing to lower the interest rate on your mortgage loan. Each point is equal to 1% of the loan amount. The decision to pay discount points depends on your individual financial situation and your long-term plans for the property. Here's how they work:
Paying Discount Points:
When you pay discount points, you're essentially paying upfront to reduce your monthly mortgage payments over the life of the loan.
Each point typically reduces your interest rate by a certain percentage (usually around 0.25% per point), which can lead to significant savings on interest payments over the years.
Advantages of Paying Discount Points:
Lower Monthly Payments: By paying points, you'll have lower monthly mortgage payments, which can make homeownership more affordable.
Long-Term Savings: Over the life of the loan, the lower interest rate can result in substantial savings in interest costs.
Considerations:
Break-Even Point: Calculate the break-even point, which is the point at which your upfront payment is recouped through the lower monthly payments. If you plan to stay in the home beyond the break-even point, paying points can make financial sense.
Upfront Costs: Paying points requires a higher upfront cost at closing, which can impact on your immediate finances.
When to Consider Paying Discount Points:
You have the funds available for the upfront cost.
You plan to stay in the home for a long time, beyond the break-even point.
You want to minimize your monthly mortgage payments.
When to Consider Not Paying Discount Points:
You plan to sell or refinance the property within a few years.
You don't have the extra funds available for the upfront cost.
You're focused on minimizing upfront costs rather than long-term savings.
It's important to run the numbers and consider your financial goals before deciding whether to pay discount points. Contact me. I can help you determine whether paying points aligns with your overall financial strategy.
September 21, 2023
Being self-employed can bring a unique set of considerations when it comes to applying for a mortgage loan. Self-employed individual's financials are reviewed in a unique way to ensure loan eligibility.
Here are some key points to keep in mind during the mortgage loan process as a self-employed person:
Documentation: Be prepared to provide thorough documentation of your financial situation. This includes several years of tax returns, both personal and business, as well as profit and loss statements and balance sheets for your business.
Stable Income: Lenders will want to see consistent and stable income over the past few years. If your income fluctuates, it's a good idea to have a detailed explanation ready to provide context.
Debt-to-Income Ratio: Your debt-to-income ratio (DTI) is a crucial factor in mortgage approval. This ratio compares your monthly debt payments to your gross monthly income. Lowering your DTI by paying down debts can improve your eligibility.
Credit Score: Your credit score will influence the interest rate you receive. Aim to maintain a strong credit score by paying bills on time and managing your credit responsibly.
Tax Deductions: While tax deductions can help reduce your tax liability, they can also lower your reported income. Keep this in mind when applying for a mortgage, as your qualifying income may be different from your taxable income.
Assets: Your liquid assets will also need to be verified to ensure you have enough reserves to cover mortgage payments and other expenses.
Business Expenses: Be cautious with aggressive write-offs or deductions that may lower your qualifying income. It's a balance between reducing your tax liability and showing enough income for loan approval.
Down Payment: Having a larger down payment can offset potential concerns about income stability.
Being self-employed doesn’t mean one can’t get a mortgage. Before deciding on what is the best loan for you, please contact me or my team. We would like to help you obtain your homeownership goals.
September 15, 2023
Conventional mortgage loans are the most common types of home loans. They are also called “conforming” loans, which simply means that it meets the requirements for Fannie Mae or Freddie Mac, government-sponsored enterprises that purchase mortgages, to sell them to investors. This frees up lenders’ funds so they can get more qualified buyers into homes.
Here are some key features of conventional mortgage loans:
Down Payment: Conventional loans typically require a higher down payment. The minimum down payment can vary, but it's generally around 3% to 20% of the home's purchase price. The exact amount depends on your situation.
Credit Score: Conventional loans usually have stricter credit score requirements compared to FHA loans. A higher credit score can lead to better interest rates and terms.
Private Mortgage Insurance (PMI): If your down payment is less than 20% of the home's value, you'll likely need to pay for private mortgage insurance. Once your home equity reaches 20%, you may be able to request the removal of PMI.
Loan Limits: Conventional loans have higher loan limits, which means they can be used to finance more expensive homes. Limits vary by location.
Interest Rates: Conventional loan interest rates can be competitive, especially if you have a strong credit history. Your credit score, down payment, and market conditions can all impact on the interest rate you're offered.
Term Options: Conventional loans offer various term options, including 15-year and 30-year fixed-rate mortgages. Shorter-term loans generally have lower interest rates but higher monthly payments.
Appraisal: An appraisal report is often required to determine the fair market value of the property. The loan amount is based on the appraised value.
Documentation: Conventional loans require thorough documentation of your financial situation, including income, employment history, assets, and debts.
Flexibility: Conventional loans offer flexibility in terms of property types. They can be used to finance primary residences, second homes, and investment properties.
Refinancing: Conventional loans can be refinanced to take advantage of lower interest rates, change the loan term, or access home equity.
It's important to note that conventional loans have advantages like potentially lower costs in the long run, but they also have stricter requirements compared to government-backed loans. Before deciding, please contact me or my team. We would like to help you determine what is the best loan for your homeownership goals.
September 8, 2023
Getting a prequalification letter is an important step in the homebuying process as it gives you an estimate of how much you might be able to borrow from a lender.
Here's how to obtain a prequalification letter:
Gather Your Financial Information: Collect all the necessary financial documents, including recent pay stubs, W-2 forms, tax returns, and bank statements. This information will help assess your financial situation.
Go online to www.uccumo.com: Click “Loans” then ” then click “Apply Now” at the top of the page.
Provide Your Information: You will enter information about your financial situation, including your income, assets, debts, and expenses. Make sure to provide accurate information to get an accurate prequalification estimate.
Credit Check: A credit check will be performed to assess your creditworthiness. This will provide an idea of your credit score and credit history.
Receive Prequalification Letter: One of our team members will review the entered information. If you meet the lending criteria, we will provide you with a prequalification letter and summary of charges. These documents will outline the estimated loan amount you may qualify, based on the information you provided.
Shop for your new home: With a prequalification letter, You can begin working with sellers to find the right home for you Once you are under contract for your new property, a more thorough analysis of your financial situation and verification of the information you provided. The loan process is much more in-depth.
It's important to note that a prequalification letter is not a guarantee that you will be approved for a loan. It's simply an estimate based on the information you provided. And keep in mind that prequalification letters have expiration dates, so if you don't find a home within ninety days, you might need to go through the process again.
United Consumers Credit Union would love to help you with the right mortgage. I look forward to working with you.
September 1, 2023
An FHA (Federal Housing Administration) mortgage loan is a type of home loan insured by the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development (HUD). FHA loans are designed to make homeownership more accessible, especially for first-time homebuyers and individuals with lower credit scores.
Here are some key features of FHA mortgage loans:
Low Down Payment: One of the main advantages of FHA loans is the lower down payment requirement. Borrowers can typically put down as little as 3.5% of the home's purchase price.
Credit Score Flexibility: FHA loans are more lenient when it comes to credit score requirements. Borrowers with lower credit scores may still qualify for an FHA loan, whereas conventional loans might have stricter credit requirements.
Mortgage Insurance: FHA loans require both an upfront mortgage insurance premium (MIP) and an annual MIP. This insurance protects the lender in case the borrower defaults on the loan. The MIP is usually rolled into the loan amount and paid monthly.
Debt-to-Income Ratio: FHA loans may allow a higher debt-to-income ratio compared to conventional loans. This means that a larger portion of your income can go toward your monthly housing expenses.
Property Requirements: FHA loans have specific requirements for the condition of the property. The property must meet certain safety and livability standards. FHA appraisals are typically more comprehensive than conventional appraisals.
Limits on Loan Amount: There are limits on the amount you can borrow with an FHA loan, which vary by location. These limits are set to prevent the FHA program from being used for luxury properties.
Assumable Loans: FHA loans are assumable, which means that if you sell your home, the buyer can take over your FHA loan if they qualify. This could be advantageous if interest rates have risen since you obtained your loan.
It's important to note that while FHA loans offer benefits like lower down payments and more flexible credit requirements, they also come with certain limitations and costs, such as mortgage insurance. Before deciding on an FHA loan, please contact me or my team as you consider what is best for your situation. and homeownership goals.
August 25, 2023
Buying your first home is an exciting but complex process. Here are some key things to know as a first-time homebuyer:
Understand Your Budget: Determine how much you can afford by assessing your finances, including income, debts, and expenses. Use UCCU’s online calculators to estimate monthly mortgage payments, property taxes, insurance, and other costs.
Get Prequalified: Before you start house hunting, get prequalified for a mortgage with me or my team. This will give you a clear idea of your budget and show sellers that you're a serious buyer.
Work with Professionals: Hire a real estate agent who specializes in first-time homebuyers. They can guide you through the process, negotiate on your behalf, and help you find the right home.
Location Matters: Consider the location's proximity to work, schools, public transportation, and amenities. Research the neighborhood's safety, property values, and future development plans.
Prioritize Needs vs. Wants: Make a list of must-have features (needs) and features you'd like but can live without (wants). This will help you narrow down your options and stay focused during your search.
Research Home Loans: Speak with a UCCU Mortgage Loan Originator to review and compare different types of mortgage loans. We will consider factors like interest rates, down payment requirements, and loan terms. FHA, Conventional, and VA loans are common options.
Budget for Additional Costs: In addition to the down payment and mortgage, budget for closing costs (around 2-5% of the home's purchase price), property taxes, homeowners’ insurance, maintenance, and utilities.
Negotiation: Work with your real estate agent to negotiate a fair offer. They will help you determine a competitive price based on market conditions and comparable sales.
Appraisal and Financing Contingencies: Include contingencies in your offer that allow you to back out if the home doesn't appraise for the purchase price or if you can't secure financing.
Closing Process: The closing process involves signing a lot of paperwork, including the mortgage agreement and ownership transfer documents. We will guide you through this process.
Remember, buying a home is a big decision. Take your time, do your research, and consult professionals at UCCU along the way. It's a journey that can lead to a rewarding investment in your future. We would like to help you determine what is the best loan for your homeownership goals.
August 18, 2023
You don't need perfect credit to get a mortgage, but a higher credit score can significantly improve your chances of securing a favorable loan. Your credit score plays a crucial role in determining the interest rate you'll be offered, which in turn affects your monthly payments and the total cost of your loan.
Here's how credit scores generally impact mortgage eligibility:
Excellent Credit (720 and above): With an excellent credit score, you're likely to qualify for the best interest rates and terms. Lenders view you as a low-risk borrower.
Good Credit (680 - 719): You should still be able to qualify for competitive rates with good credit. However, you might not get the absolute best rates available.
Fair Credit (620 - 679): You can still qualify for a mortgage with fair credit, but you may face higher interest rates. You might also need to provide additional documentation to support your application.
Poor Credit (Below 620): While it's more challenging, it's still possible to get a mortgage with poor credit. However, you might need a larger down payment and higher interest rates. Some government-backed loans like FHA loans have more lenient credit requirements.
It's important to note that credit score is just one factor lenders consider. They also assess your debt-to-income ratio, employment history, income stability, and other financial factors. If your credit score isn't as high as you'd like, there are steps you can take to improve it before applying for a mortgage:
Pay bills on time.
Pay down existing debts.
Avoid opening new lines of credit.
Check your credit report for errors and dispute any inaccuracies.
Keep credit card balances low.
Don't close old accounts, as they contribute to the length of your credit history.
If you're concerned about your credit score, it's a good idea to consult with a credit consulting company. They can provide guidance on your specific situation and help you understand your options. Remember that improving your credit score can lead to better mortgage terms and save you money over the life of the loan.
August 11, 2023
When getting a mortgage, people often have a range of questions. Here are some common questions along with brief answers:
What is a Mortgage? A mortgage is a loan specifically used to purchase real estate. It's secured by the property itself and repaid over time, usually with interest.
How Much Can I Borrow? The amount you can borrow depends on your income, credit score, down payment, and other financial factors. A prequalification will give you a clearer picture.
What's the Minimum Down Payment? It varies by loan type, but conventional loans often require 3-20% down, while FHA loans may require as little as 3.5%.
What Are Closing Costs? Closing costs include fees for services related to the mortgage, such as appraisal, title insurance, and lender fees. They typically range from 2-5% of the home's price.
What's Private Mortgage Insurance (PMI)? PMI is required if you put less than 20% down on a conventional loan. It protects the lender if you default. Once your equity reaches 20%, you can usually cancel PMI.
What's the Loan Term? The loan term is how long you have to repay the mortgage. Common terms are 15 and 30 years. Shorter terms generally have higher monthly payments but lower interest costs over time.
What's the Difference Between Points and Interest Rates? Points are upfront fees paid to lower your mortgage interest rate. Each point is usually 1% of the loan amount.
How Does Credit Score Affect Interest Rates? Higher credit scores typically lead to lower interest rates. A good credit score can save you money over the life of the loan.
What's Escrow? Escrow is a third-party account where money is held for payment of property taxes and homeowners’ insurance. The lender manages these payments on your behalf.
How Long Does the Process Take? It takes around 30 days from application to closing, but this can vary based on factors like receiving borrower information and the complexity of the application.
Remember that each individual's situation is unique, so it's always a good idea to consult with a mortgage professional to get accurate and personalized answers to your specific questions.
August 4, 2023
Working with a credit union, like United Consumers Credit Union, when getting a home mortgage can offer several advantages:
Lower Interest Rates and Fees: Credit unions are not-for-profit institutions, and our primary goal is to serve our Members rather than generate profits. This translates into lower interest rates and fees on mortgages compared to traditional banks.
Personalized Service: Credit unions are known for their personalized approach to banking. We provide more individualized attention and support throughout the mortgage process.
Community Focus: Credit unions are rooted in local communities. We understand the local real estate market and can provide insights into neighborhood trends and values.
Member-Centric Approach: As a member-owner of a credit union, you are a part of a cooperative financial institution. Credit unions prioritize their members' needs and well-being.
Flexible Criteria: Credit unions have more flexible lending criteria compared to large banks. We are willing to work with you if you have unique financial circumstances or a lower credit score.
Local Decision-Making: Credit unions make lending decisions locally, which can lead to faster approvals and a more streamlined process.
Long-Term Relationship: When you become a member of a credit union, you're joining a financial community. Establishing a relationship can lead to benefits beyond your mortgage, such as access to other financial products and services.
Ethical Values: Credit unions emphasize ethical values and community development. By choosing a credit union, you're supporting an institution that is committed to these principles.
Member Ownership: Credit union members have a say in the organization's decisions, including the products and services offered. This member-driven approach can lead to more customer-centric offerings.
Consistent Servicing: After the mortgage is originated, credit unions retain the servicing of the loan. This means you'll continue to work with the same institution for ongoing loan management and payments.
June 1, 2023
Owning a home is referred to as the American Dream. While statistics show that homeownership is down from historical levels, it is still an aspiration for 61% of Americans. That is why President Joe Biden has issued a proclamation recognizing June as National Homeownership Month, showcasing homeownership as a source of economic strength and emphasizing the need to increase the ranks of homeowners, especially among minorities. This national spotlight on homeownership began as a weeklong recognition in 1995 and was first proclaimed to last the entire month in June 2002 under President George W. Bush.
A home is more than just a residence. It is a place that instills a sense of pride, security, and comfort that, no matter what challenges in life arise, it is somewhere to go and call your own. Whether owning or renting, a home is where we can live with dignity and watch our families grow. During National Homeownership Month we recognize the importance of housing and reaffirm our community’s commitment to ensuring that everyone has a place to call home.
Homeownership also helps to improve the areas surrounding individual homes. The housing industry is closely tied to the economy—when home sales are up, so are jobs. Together, these complementary forces create a more stable local, state, and national economy. The community also benefits from the real estate taxes paid by the property owner. These funds are used for infrastructure services and projects.
Buying a home is the biggest financial investment most people make in their life and much more. Our homes offer a sense of place and community. It is where we share our lives, build our futures together and make priceless memories.
Opening the door to homeownership assists families in finding security and stability. It offers them a place to call their own and builds strong communities. Every day, mortgage providers like United Consumers Credit Union promote housing opportunities and help people in our city realize the American dream of homeownership.
For generations of families, homeownership has been essential to their plans for their lives and their futures. Beyond the emotional benefits, homeownership builds household wealth. A homeowner's average net worth in 2021 was $300,000 – nearly 38 times that of a renter at $8,000, according to recent research from the National Association of Realtors®.
United Consumers Credit Union would like to help you determine what is the best loan for your homeownership goals. Visit our website at uccumo.com for the most up-to-date and accurate information about our services.
March 3, 2023
When you are buying a new home, remember that the down payment is not the only cost that you need at closing time. Closing costs are expenses to set up your mortgage. Many buyers do not take into account the closing cost when estimating how much money they need for their new home. I want to outline some common items that are part of the closing costs.
Appraisal Report
Credit Reporting Fee
Discount Points
Escrow Funds
FHA Mortgage Insurance
Flood Certification
Homeowners Insurance
Lender’s Title Insurance
Owner’s Title Insurance
Prepaid Daily Interest Charges
Private Mortgage Insurance (PMI)
Property Tax
Recording Fee
Title Search Fees
VA Funding Fee
When it comes to closing cost, not every buyer will pay the same amount in closing costs. Some costs are the loan program requirements or government requirements. Please contact me or my team as you consider what is best for your situation. We would be glad to walk you through the process and give you some advice on what works for you.
February 23, 2023
When you are buying a new home, remember that the down payment is not the only cost that you need at closing time. Closing costs are expenses to set up your mortgage. Many buyers do not take into account the closing cost when estimate how much money they need for their new home. I want to clarify closing cost for you and some suggestions on how to reduce those cost.
Closing costs include fees that go to many different providers that help put together the mortgage loan. You will need funds to pay an appraiser, homeowner insurance company, tile company, tax collector, and credit report, all in addition to the lender themselves.
The specific closing costs you’ll need to pay depend on the type of loan you take and where you live. But typically closing costs can make up around 5% of the loan amount. This means that if you take out a mortgage worth $200,000, you can expect closing costs to be around $10,000. That cost can be estimated when you get a pre-approval letter from the lender.
Closing costs don’t include your down payment but can be negotiated. Both buyers and sellers pay closing costs. The buyer usually pays most of them. You can negotiate with a seller to help cover closing costs Sellers can only contribute up to a certain percentage of the loan amount, depending on the type of loan.
For most home loans, you will pay your closing costs at closing meeting, the lender accepts your down payment funds and anything you need to pay in closing costs. You might be able to save on your closing costs by working with your loan originator. You may also want to ask your seller to pay a percentage of your closing costs or take a no-closing-cost loan.
I urge you to contact me or my team as you consider what is best for your situation. We would be glad to walk you through the process and give you some advice on what works for you.
January 9, 2023
If you are looking for a new home or a refinance, you may have heard about the changing environment for homeowners over the past year. These changes have created some uncertainty for the new year. So, I wanted to provide you a preview of what the home market may bring us in 2023.
In 2022, mortgage rates substantially rose which dramatically slow down both home sales and refinances. The average 30-year fixed-mortgage rate is currently at 6.17%,when last year it was at 3.22%. Sales of existing homes are now selling at the slowest pace in 10 years.
For 2023, experts predict that rates will probably peak around 7.25% for 30-year loans, then gradually come down over the course of the year to a range of 5.25%. This will depend on the Federal Reserve’s ability to get inflation under control and ease up on its aggressive rate increases.
The slowdown in home sales that’s been occurring all year will continue into 2023, dropping by around 7%. Home prices won’t drop in 2023 but are predicted to state relatively flat, increasing by only 1%. That’s not great news for sellers, but its good news for house-hunters. A shortage of homes has helped fuel the frenzied market of the last few years, but inventory should rise throughout 2023.
The bottom line is that the impact of higher mortgage rates and lower home prices in 2023 will likely cancel each other out to a great extent. Overall home affordability won’t change dramatically.
So, in 2023, the housing market will become lukewarm in comparison to the very hot market of the past few years. Mortgage rates should pull back as inflation pressures continue to ease. Due to the pandemic, we saw a frantic housing market with very low interest rates and sky rocketing prices. That has stopped in 2022. We will see a return to a more normal market in 2023, meaning if you are looking to be a homeowner, this upcoming year may be a good time for you.
There is still uncertainty anytime one gets a new home or a refinance. I urge you to contact me or my team as you consider what is best for your situation. We would be glad to walk you through the process and give you some advice on what works for you. Have a great new year!